Kinross Gold Corporation · TSX:K
Kinross Gold — Merger or Acquisition (April 2010)
45 slides from Kinross Gold's merger presentation, Apr 21, 2010
Slide 1: Delivering Disciplined Growth
Delivering Disciplined Growth BMO Sales Desk Presentation Toronto, ON April 20, 2010 Filed by: Kinross Gold Corporation This communication is filed pursuant to Rule 425 under the Securities Act of 1933, as amended Subject Company: Underworld Resources Inc. Exchange Act File Number: 333-165573 Date:
Slide 2: Cautionary Statement on Forward-Looking Information
Cautionary Statement on Forward-Looking Information All statements, other than statements of historical fact, contained or incorporated by reference in this presentation, including any information as to the future financial or operating performance of Kinross, constitute “forward-looking information
Slide 3: Why Kinross?
Why Kinross? Growing cash flow Production has risen while margins have expanded CFPS(1): 5 yr CAGR : 25% Strong balance sheet: ~$1.1 bn in cash Pipeline of future opportunities Increasing reserve and resource base Growth in gold oz. per share – 19% 5-yr CAGR(2,3) High-quality projects & new mine exp
Slide 4: Kinross' Evolution
Non-operated JVs Various geographies $154 mm cash flow (’04) $54 mm cash on hand $2.4 bn market cap Margin : $161/oz. (‘04) 8 operating mines Focus in core regions $937.2 mm cash flow (‘09) ~$1.1 bn cash on hand $12.3 bn market cap Margin: $530/oz. (‘09) Proven track record Investment strategy Next
Slide 5: Major gold discoveries: 1997-2008
Major gold discoveries: 1997-2008 Source: : Metals Economics Group and Company estimates 10 5 6 5 2 3 7 5 0 8 2 # of Major Gold Discoveries
Slide 6: World Gold Reserves and Resources
World Gold Reserves and Resources Source: USGS Total Reserves & Resources (mm ozs) Country Total Reserves & Resources (tonnes) % 1. South Africa 997 29.7% 2. Russia 225 6.7% 3. Australia 193 5.8% 4. Indonesia 193 5.8% 5. U.S 177 5.3% 6. Canada 135 4.0% 7. China 132 3.9% 8. Chile 109 3.3% 9. Mexico 1
Slide 7: Growing Margins and Growing Cash Flow
41% production growth: 2007 to 2009 Margin growth: 27% 5-yr CAGR CFPS growth: 25% 5-yr CAGR Growing Margins and Growing Cash Flow 7
Slide 8: Focused Portfolio in Five Countries
Focused Portfolio in Five Countries Portfolio of Mines and Projects Chile Maricunga La Coipa Lobo-Marte Cerro Casale United States Fort Knox Kettle River-Buckhorn Round Mountain Brazil Paracatu Crixas Russia Kupol Dvoinoye* Ecuador Fruta del Norte Canada White Gold** - Operating mine - Development p
Slide 9: 2010 Production Guidance
2010 Production Guidance Country Production Cost of Sales / oz. Number of Mines Estimated Mine Life Ounces (000s) % of 2010e total Chile 460 – 480 21% $500 – 520 2 16+ Brazil 510 – 580 24% $490 – 555 2 30+ Russia(6) 495 – 525 23% $340 – 365 1 8+ USA 690 – 745 32% $480 – 520 3 7+ Total Kinross(4): 2.
Slide 10: Expanding Margins: +27% 5-yr CAGR
Expanding Margins: +27% 5-yr CAGR 2004 – 2009: Average realized gold price: +139% Kinross’ attributable cost of sales margin(7): +229% +229% (7) Refer to endnote #7.
Slide 11: Growing Cash Flow per Share
Record high operating cash flow(1) in 2009 (+35% vs. 2008) 5-yr CAGR: 25% Growing Cash Flow per Share Refer to endnote #1.
Slide 12: Gold Resource Growth
Gold Resource Growth(2) (2) Refer to endnote #2. (3) Refer to endnote #3. (3) *2009 reserve and resource figures for Cerro Casale have been adjusted to reflect the sale of half of Kinross’ 50% interest to Barrick Gold Corporation.
Slide 13: Strong Financial & Operating Performance
Record production in 2009 Record cash flow and margins in 2009 Growing reserves and resources Strong Financial & Operating Performance 13
Slide 14: Highlights from Q4 2009
Highlights from Q4 2009 Q4 ‘09 Highlights Production increased to 613,858 Au eq. oz. (up 12% from Q4’08) Cost of sales(5): $437/oz (co-product); $383/oz (by-product) Record cost of sales margin(7) of $657/oz. (up 57% from Q4’08) FY ‘09 Highlights Production increased to 2,238,665 Au eq. oz (up 22% f
Slide 15: Performance Improvement in Q4 2009
Performance Improvement in Q4 2009 Production up 14% Costs down 6% Gold equivalent production (oz.) Cost of Sales ($/oz.)(5) Refer to endnote #5.
Slide 16: 2009 Full-Year Results
Realized Gold Price +13% $967/oz Cost of Sales +4% $437/oz COS Margin(7) +22% $530/oz 2009 Full-Year Results (8) (7) Refer to endnote #7. (8) Refer to endnote #8. (in millions, except ounces and per share amounts) 2008 2009 % Change Gold equivalent production (ounces) 1,838,038 2,238,655 22% Gold eq
Slide 17: Update on Corporate and Regional Organization
Update on Corporate and Regional Organization Newly-strengthened regional organization and management teams Four strategic operating groups: Provides increased focus and integration in the critical areas of new project development, project permitting and corporate responsibility New regionally-focus
Slide 18: Pipeline of Projects for the Future
Further organic growth at our mines Advancing next suite of projects Exploration & JV strategies Pipeline of Projects for the Future 18
Slide 19: Maricunga Expansion and Paracatu 3rd Ball Mill
Maricunga, Chile - Expansion Scoping study completed late 2008 Feasibility study expected in first half of 2010 Concept: update mining fleet; construct new primary crusher and conveyor; increase capacity of existing crushing plant Potential to increase ore processing and throughput by ~50% At-Site G
Slide 20: Kinross to Acquire High-grade Kupol Satellite Deposit
Kinross to Acquire High-grade Kupol Satellite Deposit Acquiring 100% of the Dvoinoye deposit and Vodorazdelnaya concession(9) High-grade deposit ~90 km north of Kupol Estimated potential deposit of ~3.5 – 3.9 mm tonnes at an average grade of ~17 – 19 g/t Au(10) Exploration potential at Vodorazdelnay
Slide 21: Kupol and Dvoinoye
(10) Refer to final slide endnote #10. KUPOL Dvoinoye Small scale-open pit mine Operates 6 months of the year Potential resource of 3.5 – 3.9 mm tonnes at an average grade of ~17 – 19 g/t Au(10) DVOINOYE
Slide 22: Dvoinoye Directly Aligns with Kinross Strategy
Dvoinoye Directly Aligns with Kinross Strategy High-grade deposit Leverages nearby-existing infrastructure, operating and technical expertise Expected capital cost benefit by processing Dvoinoye ore at existing Kupol mill vs. building stand-alone processing facilities Further exploration potential i
Slide 23: Lobo-Marte, Chile
Completed pre-feasibility study Capital estimate: $575 – $650 million 47,000 tpd heap leach with SART plant Operating costs expected to be $11.50-$12.50 per tonne Estimated start date: 2014 Annual production: 350-400k oz. per year (first five years of full production) Lobo-Marte, Chile Lobo-Marte La
Slide 24: Fruta del Norte, Ecuador
18,000 metre drill campaign in 2010 Expected to be completed by Q3 2010 Pre-feasibility expected by year-end Environmental Impact Statements to be submitted in Q2 2010 for drilling permits for Colibri concession Strengthened leadership: Appointment of RVP Eduardo Flores Continue to work with governm
Slide 25: Fruta del Norte/Condor
Fruta del Norte/Condor Exploration to date has located a number of epithermal and porphyry-style targets which will be the focus of continued regional exploration FDN NI 43-101 Technical Report*: Describes major exploration targets in area of Suarez pull-apart basin Estimated 2010 FDN exploration sp
Slide 26: Update on Cerro Casale
Update on Cerro Casale Sold down interest from 50% to 25%: Total value: $475 mm Rebalances Cerro Casale in our overall portfolio, reduces future capital and increases cash Lobo-Marte La Coipa Maricunga Cerro Casale ~110 km Finalizing feasibility study that envisions (for 25% interest): Kinross share
Slide 27: Exploration Success at La Coipa
Exploration Success at La Coipa In-pit / near-pit drilling program increases reserves and extends mine life In 2009, 28,400 m drilling adds 503koz net increase in reserves Added 3 years to mine life (from 2012 to 2015) Continue in-pit / near-pit exploration in 2010 Coipa Norte, Puren, Ladera Farello
Slide 28: Kinross Acquires Underworld Resources
Kinross Acquires Underworld Resources Kinross announced a friendly deal to acquire 100% of Underworld Resources(11) Excludes 8.5% already owned by Kinross (fully-diluted) Offer unanimously supported by the Underworld Board 0.141 of a Kinross share + $0.01 cash for each share of Underworld Implied of
Slide 29: Overview of Underworld
Overview of Underworld Main asset: White Gold project Early stage property with 121 holes (29,235m) drilled* Located in the Tintina gold belt 95 km south of Dawson City, Yukon Territory, Canada Recently released resource estimate and technical report for the Golden Saddle and Arc deposits * * Indica
Slide 30: Valuation
Valuation
Slide 31: BMO: P / 6% NAV
BMO: P / 6% NAV Source: BMO Gold Pages – April 19, 2010
Slide 32: BMO: P / 2010 CFPS
BMO: P / 2010 CFPS Source: BMO Gold Pages – April 19, 2010
Slide 33: Key Objectives for 2010
Key Objectives for 2010 Declare increased reserves Complete Lobo-Marte pre-feasibility study Final feasibility study for Cerro Casale Close sale of 25% of Cerro Casale Complete acquisition of Underworld Resources Complete Maricunga Expansion feasibility study (H1’2010) Close Dvoinoye acquisition Del
Slide 34: [LOGO]
[LOGO]
Slide 35: Endnotes
Endnotes Unless otherwise stated, all cash flow and cash flow per share figures in this presentation are adjusted operating cash flow. Adjusted operating cash flow figures are non-GAAP financial measures which are meant to provide additional information and should not be used as a substitute for per
Slide 36: Cautionary Note to Shareholders in the U.S.
Cautionary Note to Shareholders in the U.S. Information in this presentation, including the documents incorporated by reference herein, has been prepared in accordance with the requirements of securities laws in effect in Canada, which differ from the requirements of United States securities laws. W
Slide 37: Appendix
Appendix 37
Slide 38: Round Mountain, USA (50%)
Round Mountain, USA (50%) Kinross-operated JV with Barrick Located in Nevada, USA Open pit mine Operating Results Production (Au eq. oz) Cost of Sales ($/oz) 2009 213,916 $517 2008 246,946 $465 2009 Gold Reserves and Resources(3) Tonnes (thousands) Grade (g/t) oz (thousands) 2P Reserves 71,493 0.64
Slide 39: Kettle River, USA (100%)
Kettle River, USA (100%) Entered production in Q4’08 Small foot-print, underground mine 2009 first full year of production Near-mine exploration Operating Results Production (Au eq. oz) Cost of Sales ($/oz) 2009 173,555 $294 2008 27,036 $344 2009 Gold Reserves and Resources(3) Tonnes (thousands) Gra
Slide 40: Kupol, Russia (75%)
Kupol, Russia (75%) 3,000 tpd mill with open-pit and underground operation 2009 first full year of production Operating Results Production (Au eq. oz) Cost of Sales ($/oz) 2009 694,130 $257 2008 469,907 $220 2009 Reserves and Resources(3) Tonnes (thousands) Grade (g/t) Ounces (thousands) 2P Reserves
Slide 41: Paracatu, Brazil (100%)
Paracatu, Brazil (100%) Operating Results Production (Au eq. oz) Cost of Sales ($/oz) 2009 354,396 $693 2008 188,156 $450 2009 Gold Reserves and Resources(3) Tonnes (thousands) Grade (g/t) Ounces (thousands) 2P Reserves 1,320,886 0.41 17,472 M&I Resources 225,581 0.41 2,994 Recoveries near target Ma
Slide 42: Crixas, Brazil (50%)
Crixas, Brazil (50%) JV with AngloGold Ashanti Underground mine located in the Brazil Operating Results Production (Au eq. oz) Cost of Sales ($/oz) 2009 74,654 $412 2008 87,669 $302 Reserves and Resources(3) Tonnes (thousands) Grade (g/t) Ounces (thousands) 2P Reserves 2,923 3.70 347 M&I Resources 3
Slide 43: La Coipa, Chile (100%)
La Coipa, Chile (100%) Gold/silver mine in the Maricunga district Mill facility located 60km from Lobo-Marte deposits Comprehensive exploration program Operating Results Production (Au eq. oz) Cost of Sales ($/oz) 2009 231,169 $438 2008 226,293 $489 2009 Reserves and Resources(3) Tonnes (thousands)
Slide 44: Maricunga, Chile (100%)
Maricunga, Chile (100%) Located the highly prospective Maricunga District Open pit, heap leach operation Expansion under review Operating Results Production (Au eq. oz) Cost of Sales ($/oz) 2009 233,585 $521 2008 223,341 $566 2009 Gold Reserves and Resources(3) Tonnes (thousands) Grade (g/t) Ounces
Slide 45: [LOGO]
[LOGO]